General News
Below are links to stories of general interest in relation to aviation and airports.
Fears on how Tory party want post-Brexit bonfire of EU “red tape” on environment etc regulations
Brexit comes with immense uncertainties, one of the main ones for anyone concerned with the state of the environment, air pollution, water pollution, or carbon emissions, is how much European legislation will be dumped. The Telegraph writes of how keen it, and many in the government, are to get rid of tiresome regulations that hold back business and economic growth, for no better reason than environmental protection. There are comments like these: the "Telegraph calls on the Conservative Party to promise a bonfire of EU red tape" ... Iain Duncan Smith thinks the Tories should promise at the next election to “whittle away” unnecessary rules, reducing the “burden” on businesses and citizens. ... "we can reduce the cost on business and on individuals by reducing regulations which will improve our competitiveness, our productivity and therefore ultimately our economy” ... Lord Lawson (prominent climate denier) says UK must swiftly seize the chance to “transform the British economy” by cutting “massive” numbers of EU regulations. ... "Builders have been frustrated by rules on preserving newts, which are classed as “endangered” in Europe even though they are thriving in the UK" [probably due to years of protection] .... The Green Alliance is working to ensure proper environmental protections survive. Read their blog here.
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IPPR says apprenticeship levy will deepen north-south divide – with areas like Heathrow benefitting
One of Heathrow's most often repeated claims as benefits for a 3rd runway is taking on 5,000 more apprentices, taking the number up to 10,000, by 2030. In reality, much of the training for apprentices comes from the government, so companies benefit. Many of the apprentices are not young people entering a first job, but existing staff improving their skills. Heathrow would benefit, and get money back, that they have to pay into the levy. Now analysis from the Thinktank the Institute for Public Policy Research (IPPR) suggests the new £3 billion levy on larger employers, starting in April 2017, will raise less money and have smaller impact on areas that need it most - in the regions. Instead it will deepen Britain’s north-south divide, with London and the south-east benefiting most, as this is where there is the highest number of big employers. The areas where it is most needed are those that have been hit by deindustrialisation and suffer from low levels of qualifications, low productivity and low pay. Not the Heathrow area. The levy is to be paid by employers in England with a payroll of more than £3m and charged at a rate of 0.5% of their annual wage bill (ie. perhaps nearly £3bn per year.) The IPPR said: the government should analyse the regional impact of its new apprenticeships policy, so it does not leave unemployment hotspots in the north-east or Yorkshire with proportionately less funding.
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Virgin likely to be in the red again, and wants lower charges if Heathrow gets a 3rd runway
Virgin Atlantic wants Heathrow to reduce its passenger charges once (perhaps that should say IF) its 3rd runway opens. Virgin CEO Craig Kreeger said charges are already too high. Virgin, naturally, wants flying to be as cheap as possible - or growth in numbers is slower (less profit). Virgin is not doing very well at present. The Times reports that Virgin Atlantic's pre-tax profit, excluding exceptional items, rose by 2.2% to £23 million last year - the 3rd successive year it has been in the black. However, it may make a loss this year, because it faces competition from British Airways and increasing capacity in the North Atlantic market. BA will start low cost transatlantic flights from £86 this summer, on a new airline called Level, from Barcelona.They also have to contend with lower air fares, rising fuel prices, fears of London terrorism and currency fluctuations that will hit profits. Virgin faces weak consumer confidence since the £’s fall against the US $, making trips from the UK to the US, its main route, more expensive. Virgin has to pay more for its fuel and new planes now, as these are bought in dollars. It is not yet known if many US tourists will be wary of coming to London, after the killings in Westminster. Virgin's air cargo turnover fell 15.9%, due to weaker sterling and overcapacity in the market.
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Level: British Airways sister airline offering transatlantic fares dramatically lower than rivals
Now many Brits are so affluent, and have been on holiday to all the conventional holiday spots in Europe, they want to go on longer haul trips to more far flung destinations. The price of air travel is so low, that people can have higher and higher carbon holidays and leisure trips, for remarkably little cost. The great hopes of the airlines, and the public who want to visit everywhere they can by air, is for long haul to become super cheap. It has always been a problem, because people are reluctant to accept minimum comforts on a very long flight, of over 6 hours or so. And they then need food etc. Norwegian has cheap flights to the USA, and now IAG has launched a low cost airline, called "Level" to try to combat the challenge from Norwegian. Level is part of the IAG conglomerate, which includes Aer Lingus, Vueling and Iberia as well as BA, and it will be based in Barcelona. Level will initially fly to Los Angeles and Oakland in California, Punta Cana in the Dominican Republic and the Argentinian capital, Buenos Aires. All airlines must charge air passenger duty of £75 for departures, so flights cannot exclude this. Level plans to add more routes with more planes from summer 2018 and is "talking to other potential European airports where Level may operate".
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Packed first public meeting of new anti-Heathrow expansion group, BASHR3 in Hounslow
Nearly 200 residents packed out a church hall to attend the launch meeting of a new local anti-Heathrow expansion group - BASHR3. The first public meeting of Brentford and Hounslow Stop Heathrow Expansion (BASH Runway 3) meeting on March 21st was a lively event, with speeches from Ruth Cadbury (Brentford & Isleworth MP), John Stewart of HACAN, and Maggie Thorburn, from Friends of the Earth. Putting profits and pollution before people were high on the agenda and there were serious concerns that tens of thousands more people in Brentford , Isleworth, Osterley, Chiswick and Hounslow will be affected by a third runway. Ruth Cadbury was adamant that the threat of a third runway would be eradicated, and many claims made by Heathrow of how they would deal with problems such as noise, air pollution and carbon emissions were "laughable." ...Ruth believes that "Together, we'll see off the threat to our area for good." The 3rd runway means the massive intrusion of aircraft noise into the lives of hundreds of thousands of people, who not currently under a flight path. Being overflown for the first time would come as a deeply unpleasant shock for many, and the DfT has made no attempt to give out information about who would be affected. Air pollution will also become worse across the constituency as a result of the traffic generated by the extra cars and lorries on the local and motorway road network.
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Response by T&E to EU consultation on VAT – there is no logical reason why air travel is exempt
The EU held a consultation recently, about VAT and changes to the European Directive on it. The consultation closed on 20th March 2017. Some of objectives of the consultation were to ask if there should be greater freedom for Member States to fix VAT rates; the proper balance between harmonisation and Member States autonomy in setting VAT rates; problems of differentiation of VAT rates within the Single Market etc. Air travel is zero rated for VAT across the EU. The group "Transport & Environment" responded to the consultation, and a couple of their points were that: having no VAT on air travel means the most carbon intensive transport mode, aviation, has ticket prices which are artificially lowered, creating distortions between rail/bus and aviation/ferry. ... all Member States must impose VAT on all passenger transport, especially aviation ... where this cannot be agreed, it should be easy for some Member States to impose VAT on passenger transport ... for things that benefit society such as medicines there is a very strong argument to allow for super-reduced rates, however, climate intensive travel by air or cruise vacations are not among them. There is currently also no VAT on cruises - which are most definitely not essential items.
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UK-based airlines told to move headquarters to Europe after Brexit or lose intra-European routes
The EU has warned airlines including easyJet and Ryanair that they will need to relocate their headquarters or sell off shares to European nationals, if they want to continue flying routes within continental Europe after Brexit. Executives at major airlines have been reminded during recent private meetings with EU officials that to continue to operate on routes between European airports, they must have a significant base on EU territory and that a majority of their capital shares must be EU-owned. This will mean they will need to act to restructure, with economic consequences for the UK, including a likely loss of jobs. Theresa May is due to trigger Article 50 next week. If the EU takes a tough line, it may result in the UK reciprocating with its own rules, which would leave EU-owned airlines facing equivalent choices. Some might establish their own British subsidiaries, as the demand for air travel in the UK is high and there is money to be made. EasyJet flies many routes within Europe (not from UK) and that is part of its business model. Ryanair is based in Ireland, but has some UK shareholders it will have to replace with Europeans. BA does not fly intra- European flights, and IAG is based in Spain. IAG is likely to need to disinvest shareholders in order to be majority EU-owned, and allow its other EU-registered carriers to continue to operate across Europe. The overall impacts on the UK will not be known for some time.
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Boots to stop pocketing the VAT on items over £5 sold to passengers travelling outside the EU
Boots is finally giving customers VAT refunds at UK airport "airside" shops, following the lead of WHSmith, which began doing this in summer 2016. Airline passengers began realising in the summer of 2015 that retailers had been claiming millions of ££s in VAT refunds from those travelling outside the EU, who they identified by asking to see travellers' boarding passes. But instead of refunding the VAT to the customers, the stores pocketed it. This meant an increase in profit for the shops, and for the airports - and less for the Treasury. Boots has 29 branches at UK airports, and these shops don't have self service tills - so customers can deal with a sales assistant. VAT will only be refunded by Boots on items costing over £5, (ie. refund of £1) or £6 for WH Smiths. Presumably a lot of purchases are below £5, and so the shops will keep a lot of extra profit from these. People flying within the EU cannot get VAT removed. The shops have been demanding to see boarding cards, but only because this has enabled them to keep the 20% as profit - that has angered people.The airports charge retailers huge rent, to have the privilege of a store in the captive market of the airport departure lounge. Heathrow etc don't charge its stores a set flat rent – but rather a % of their net sales. This VAT change might slightly dent that figure.
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Major new coalition launched to fight Heathrow 3rd runway
A major new coalition has been launched to fight the proposed 3rd runway at Heathrow. The coalition is formally backed already by 18 local campaign groups, including to name a few, Stop Heathrow Expansion (SHE), HACAN, Teddington Action Group (TAG) and recently formed BASH Runway 3 (based in Brentford). More groups are expected to join in the coming weeks. The coalition also has the support of 5 local authorities as well as leading politicians from all main parties. The aim of the coalition is to put additional pressure on the Government to drop plans for the runway, building upon the work of existing opponents including campaign groups, local authorities and MPs. It will provide opponents of the runway a platform, allowing them to work effectively together - including support from MPs to the heroic local Councils challenging Heathrow in the courts. The coalition will work to highlight issues - including noise, air pollution and economics - with the DfT's current, deeply flawed, consultation on the Heathrow National Policy Statement (NPS). Though the DfT has held 20 consultation exhibition events across west London, Berkshire and Surrey, considerable numbers of residents were left disappointed that there was no information on locations of new flight paths, and that will not be presented until much later in the process.
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Four Select Committees launch an unprecedented joint inquiry into air pollution
MP’s from four Parliamentary select committees have combined forces to launch an unprecedented joint inquiry on air quality to scrutinise cross-government plans to tackle urban pollution hotspots. The Environmental Audit Committee, Environment Food and Rural Affairs, Health, and Transport Committees will hold four evidence sessions to consider mounting scientific evidence on the health and environmental impacts of outdoor air pollution. The Government has lost two UK court cases about its plans to tackle the key pollutant nitrogen dioxide (NO2). The High Court has ordered the Government to publish a draft new clean air plan to tackle NO2 by 24 April, with a final plan by 31 July. The European Commission has also threatened enforcement which could see the UK pay millions of pounds in fines if the Government does not within two months take steps to bring 16 UK zones within legal pollution limits. Louise Ellman, Chair of the Transport Committee (dealing with the draft NPS on Heathrow), said emissions from vehicles are a significant problem and the standards that governments have relied on have not delivered the expected reductions: "We will be asking what more can be done to increase the use of cleaner vehicles as well as to encourage the use of sustainable modes of transport.” Deadline is 12th May 2017.